Novo Banco to reduce workforce by 400, close 73 branches this year

Portugal’s Novo Banco is to go ahead with a process of voluntary redundancies and early retirements that should lead to the departure of more than 400 staff, as well as closing 73 branches, according to sources in the sector.

After a meeting between the bank’s board and the Works Council on Tuesday, the latter sent a statement to staff that Lusa has seen in which it said that the bank "intends to close 73" branches this year – 30 of them by the end of April.

As to job losses, the statement said that a programme of early retirement and another of voluntary redundancies are to be instituted, with which Novo Banco "intends to bring forward the commitment [to its new investor, to reduce staff numbers by 2021] to the end of the current year.”

The statement does not mention numbers, but sources contacted by Lusa indicated that the target is above 400, evenly split between redundancies and early retirements.

The bank aims to conclude the early retirement programme – for workers above 55 – in the first half of the year and the redundancy programme over the next four months, according to the Works Council statement.

When contacted, the Works Council declined to comment officially.

Novo Banco has since October been majority owned by US fund Lone Star. It has not yet unveiled its 2017 financial results, so the most recent staff figures are for end-September.

At that time the bank had 5,297 staff in Portugal, 390 fewer than at the end of 2016. It had 449 branches, down 58.

Novo Banco was created in 2014 when the Bank of Portugal wound up Banco Espírito Santo and cordoned off all its ‘toxic’ assets before setting up a new bank to carry forward the institution’s viable commercial business.

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